[DT, BT, and FT have run up more than $140 billion in debt with analysts predicting the worst is yet to come.]

by Olga Kharif, Portland, OR -- "While the U.S. market for telecommunications gear imploded in 2000 and 2001, the scene was far less dire across the pond. Compared with the double-digit declines in U.S. revenues last year, Europe faced merely flat sales, says Ben Cohen, an analyst with UBS Warburg in London.

"Now it appears the telecom storm may be spreading. Burdened with huge debts from buying new wireless spectrum for advanced mobile-phone services, the Old World's three largest telecom providers -- British Telecom, Deutsche Telecom (NYSE:DT-news), and France Telecom (NYSE:FTE-news) -- have now run up more than $140 billion in debt, according to global consultancy World Markets Research Centre.

"Last year, the Euro-trio began selling off noncore assets to staunch some of the red ink. This year, they're cutting their capital spending budgets 10% to 20%, according to Paul Sagawa of Sanford Bernstein. With 30% to 50% of these budgets dedicated to buying new equipment, the cuts will hurt gearmakers.